New York, Feb 24, 2026, 17:57 EST — After-hours
- Palo Alto Networks slipped 1.7% at the close, but shares ticked up slightly once after-hours trading kicked in.
- Daiwa trimmed its target price down to $175 but kept the “outperform” rating in place.
- Traders are still considering whether new AI tools might threaten certain parts of the security software stack.
Palo Alto Networks closed out Tuesday down 1.7% at $141.67, but managed a small after-hours recovery, adding about 0.5%. Shares moved after Daiwa Securities lowered its price target on the cybersecurity firm.
The drop deepens pressure on a stock already squeezed by strong cybersecurity appetite on one side and fresh worries over AI automation on the other. Palo Alto is leaning into “platformization,” bundling several security services together as customers aim to streamline purchasing and pare down vendor lists. Palo Alto Networks
Software and cybersecurity stocks saw a jump in volatility this week after AI upstart Anthropic asserted its technology can handle work that once needed teams of dozens. Investors, already on edge, worried that a new AI-powered security rollout could threaten existing areas of the market.
Anthropic rolled out a fresh set of enterprise plug-ins Tuesday, with features spanning deal reviews and HR tasks. The firm’s earlier releases have already put pressure on traditional software names. “It’s not a product that’s trying to own every workflow,” said Scott White, enterprise product lead at Anthropic. Reuters
Some analysts see the recent selloff as largely a story of sentiment and positioning, rather than any real shift in demand. J.P. Morgan’s Brian Essex described the move as “driven more by fear than fundamentals,” and pointed to steady security demand as AI adoption picks up. Barron’s
Palo Alto is flagging growing demand for AI-driven security, with CEO Nikesh Arora pointing to “steady and strong adoption of AI security” during the latest results. The update also emphasized ongoing integration from the company’s recent acquisitions. Palo Alto Networks
Palo Alto Networks flagged a new tie-up with ServiceNow and Bell Canada, zeroing in on big enterprise clients looking for streamlined workflows. The three companies are gearing up to launch an app that links up security operations and service management.
But what happens next for the stock depends on whether investors view AI tools as catalysts for demand or merely as price-cutting substitutes — and how quickly those deal costs filter into forward guidance.
Attention turns to possible analyst moves and any new signals on spending from cybersecurity peers, with Palo Alto’s next earnings on the calendar for May 26, per Investing.com.
